Ad Buyers Still Uncertain How GDPR Affects Their Budgets

Ad Buyers Still Uncertain How GDPR Affects Their Budgets

There’s no consensus on how the law influences ad spend

Although the European Union's General Data Protection Regulation (GDPR) is now in effect, it remains unclear to many advertisers how the new regulation will influence their ad spend.

The GDPR, which went live May 25, states that a user's data can be used only if they give a company explicit permission. About a week before the enforcement date, Vibrant Media surveyed 32 UK senior ad buyers and found that respondents were split on how they thought GDPR would affect them.

When presented with the statement that the GDPR will lead to reduction of programmatic spend, an equal number of respondents—42%—agreed and disagreed with that notion. The remaining 16% had no opinion either way on whether GDPR will curtail programmatic dollars.

These results indicate that it's not very clear to many programmatic ad buyers how the GDPR will affect their media plans. The law is ready to be enforced, but the uncertainty around it remains immense.

The anxiousness that the GDPR is creating among company executives can be seen in the fact that it is getting mentioned more on earnings calls. CB Insights analyzed more than 6,000 earnings call transcripts from companies across the globe and found that the number of times GDPR was mentioned during the calls increased from seven in Q1 2017 to 177 in Q1 2018. Facebook—which is dealing with criticism over how Cambridge Analytica accessed data from its platform—mentioned GDPR 18 times during its last earnings call, but didn’t mention it a single time during its Q1 call in 2017, according to CB Insights.

Ad buyers surveyed by Vibrant Media weren’t conflicted about everything regarding the GDPR. Nearly 70% of respondents agreed that the GDPR will lead to more emphasis on contextual targeting. This is because contextual targeting reduces reliance on user data— an attractive offering under the GDPR, since the law states that using personal data improperly without getting consent can result in a fine of €20 million ($22.6 million) or 4% of global revenues (whichever is greater).